MicroStrategy buys more than $ 1 billion worth of bitcoins, increasing massive holdings

MicroStrategy announced on Wednesday that it bought just over $ 1 billion in additional bitcoins, just days after finalizing another sale of convertible debt.

The Virginia-based business software company said it paid an average price of $ 52,765 per bitcoin, including fees and other expenses. Its acquisition of approximately 19,452 bitcoins puts MicroStrategy’s total holdings of the digital token at 90,531.

MicroStrategy revealed its first bitcoin purchase in August, using existing cash on its balance sheet to acquire the cryptocurrency. Since then, it has completed two convertible debt deals to raise capital to finance additional purchases. The most recent offering was completed last week, generating approximately $ 1.03 billion in net earnings; the notes have a coupon rate of 0%.

The news of the MicroStrategy purchase comes as the price of bitcoin rose again more than $ 50,000 on Wednesday, although it later fell below that level. The upward move follows Tuesday night news from Square, which said it bought $ 170 million worth of the cryptocurrency.

MicroStrategy said Wednesday that the average purchase price of all its bitcoin purchases is $ 23,985 per digital token. He has cumulatively spent $ 2.171 billion on bitcoin. Based on the bitcoin price on Wednesday morning, the company’s holdings were worth nearly $ 4.5 billion.

MicroStrategy shares rose more than 6% at the beginning of Wednesday’s session. The company’s shares tumbled more than 20% on Tuesday as the price of bitcoin slid.

Still, MicroStrategy’s shares have skyrocketed since they announced their initial bitcoin purchase in August, surging more than 400% as some investors flocked to stocks to gain exposure to the cryptocurrency.

MicroStrategy CEO Michael Saylor has become a prominent advocate for bitcoin in recent months, calling on other companies to purchase the digital token as an investment. On Tuesday, he told CNBC that he believes Bitcoin will one day have a market value of $ 100 trillion. As of Wednesday, bitcoin has a total market capitalization of approximately $ 920.85 billion, according to Coindesk.

Watch CNBC’s full interview with Saylor on Tuesday below.


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